- The price of silver shot out as the growing commercial tensions between the US and China revived the demand for safe refuge.
- President Trump announced an immediate increase in tariffs on Chinese imports to 125% shortly after China increased tariffs.
- The China consumer price index fell 0.1% year -on -year in March, breaching the expectations of a 0.1% increase and extending the 0.7% fall in February.
The price of silver (XAG/USD) continues to rise for the second consecutive day, quoting about $ 31.10 per Troy ounce during the Asian session on Thursday. The gray metal shot almost 4% in the previous session, driven by the renewed demand for safe refuge after the increase in commercial tensions between the US and China.
The US president Donald Trump announced an immediate increase in tariffs on Chinese imports to 125%, shortly after China increased reciprocal tariffs on US products to 84%. This escalation of reprisals eclipsed a broader effort of commercial uncalled, where the US had temporarily reduced 10% tariffs for 90 days to facilitate negotiations with other countries.
Meanwhile, the markets are digesting the latest minutes of the Federal Open Market Committee (FOMC), which suggested an almost unanimous concern among those responsible for policy on the double threat of increased inflation and slow growth, highlighting possible “difficult compensation” for the Fed.
The non -generating metal, silver, can attract a new purchase interest after the publication of the data of thethat China Consumer Price Index (CPI), which reinforces moderate expectations for the Popular Bank’s policy perspective (PBOC). China’s CPI fell 0.1% year -on -year in March, breaching the forecasts of an increase of 0.1% and after a 0.7% drop in February. In monthly terms, the CPI decreased 0.4%, more pronounced than the 0.2% February decrease and market expectations. In addition, the production price index (IPP) fell 2.5% year -on -year, exceeding the previous 2.2% drop and the projection of a 2.3% decrease, indicating continuous deflationary pressures in the economy.
Despite the growing commercial friction, Fed officials emphasized a data -dependent approach for politics. The Fedwatch of the CME tool shows that the markets are currently valuing the possibility of a rate cut at the meeting next month. Investors now direct their attention to the next IPC data and the US IPP on Friday to obtain more clarity about the Fed fees trajectory.
FAQS SILVER
Silver is a highly negotiated precious metal among investors. Historically, it has been used as a value shelter and an exchange means. Although it is less popular than gold, operators can resort to silver to diversify their investment portfolio, for their intrinsic value or as a possible coverage during periods of high inflation. Investors can buy physical silver, in coins or bullion, or negotiate it through vehicles such as the funds quoted in the stock market, which follow their price in international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can cause the price of silver to shoot due to its safe refuge status, although to a lesser extent than that of gold. As an asset without performance, silver tends to climb with lower interest rates. Its movements also depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (XAG/USD). A strong dollar tends to maintain the price of silver at bay, while a weaker dollar probably drives rising prices. Other factors such as investment demand, mining – silver supply is much more abundant than gold – and recycling rates can also affect prices.
Silver is widely used in the industry, particularly in sectors such as electronics or solar energy, since it has one of the highest electrical conductivities of all metals, surpassing copper and gold. An increase in demand can increase prices, while a decrease tends to reduce them. The dynamics in US economies, China and India can also contribute to price fluctuations: for the US and particularly China, its large industrial sectors use silver in several processes; In India, the demand for consumers for precious metal for jewelry also plays a key role in pricing.
Silver prices tend to follow gold movements. When gold prices go up, silver typically follows the same path, since their status as shelter is similar. The gold/silver ratio, which shows the number of ounces of silver necessary to match the value of an ounce of gold, can help determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that silver is undervalued, or that gold is overvalued. On the contrary, a low ratio could suggest that gold is undervalued in relation to silver.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
